Life Insurance Corporation of India (LIC) has launched a New Single Premium plan called as ‘LIC Jeevan Utkarsh‘.
This new plan from LIC is a traditional, Non-linked, with-profits, savings cum protection plan.
The risk cover under Jeevan Utkarsh is 10 times of tabular single premium amount.
This plan will be available for sale from 06/09/2017 up to 31/03/2018.
Basic Features:
•Minimum entry age : 6 years
•Maximum entry age : 47 years
•Minimum Sum Assured : Rs 75,000
•Maximum Sum Assured : No Limit (If the Sum Assured under a policy is below Rs. 3,00,000, the Sum Assured shall be in multiples of Rs. 5,000 & if the Sum Assured under this policy is Rs. 3,00,000 and above, the sum Assured has to be in multiples of Rs. 20,000.)
•Premium payment mode : Single Premium (one-time lump sum payment)
•Policy Term : 12 years
•Optional Riders : Accidental Death & Disability riders (additional premium is payable)
Benefits
Death Benefits:
•On death before the commencement of risk : Refund of Single Premium without interest. Single Premium mentioned above shall not include any taxes, extra premium chargeable under the policy due to underwriting decision and rider premium, if any. (Life assured aged 8 or more, risk will commence immediately.)
•On death after the of commencement of risk: “Sum Assured on Death” shall be payable.
•On death before completion of Five policy years – The policyholder’s nominee would receive ‘Sum assured on death’ as death benefit.
•On death after completion of five policy years but before the Date of Maturity : “Sum Assured on Death” equal to 10 times the Tabular Single Premium along with Loyalty Addition, if any, shall be payable.
Where “Sum Assured on Death” is defined as the highest of ; 125% of the single premium; or Guaranteed Sum Assured on Maturity i.e. Basic Sum Assured ; or “Absolute amount assured to be paid on death” i.e. 10 times of Tabular Single Premium
Maturity Benefits:If the Life Assured surviving to the end of the policy term, “Sum Assured on Maturity” along with Loyalty Addition (LA), if any, will be payable. Where “Sum Assured on Maturity” is equal to Basic Sum Assured.
Surrender Value:The Guaranteed Surrender Value shall be as under:
•First year: 70% of the Single premium.
•Thereafter: 90% of the Single premium
•If the policy is surrendered after completion of five policy years, Loyalty Addition, if any, shall be payable.
Settlement option:
•The policyholder can receive the settlement amount, it can be either death or maturity benefit, in installments over the chosen periods like 5 years, 10 years or 15 years (or) in the form of one-time lump sum payment.
•The installment modes can be as monthly (Minimum Rs.5,000), Quarterly (Minimum Rs 15,000), Half-Yearly (Rs 25,000) or yearly (Minimum Rs 50,000).
•If the installment amounts are below the threshold limits, then the death/maturity amount will be settled as lump sum payment only.
•Death Claim & Settlement Option – The policyholder can opt for either instalment payment or lump sum payment during the policy tenure. The nominee would receive the payments (death claim) accordingly.
•Maturity Claim & Settlement Option – The policyholder can inform the insurer (LIC) about his choice, at least 3 months before the maturity date. He/she would receive the maturity claim amount accordingly (either in installments or as lump sum payment).
Illustration:
Let’s consider an example – Policy holder’s current age is 30 years (male), buys this policy for Sum Assured of Rs 5 Lakh and pays single premium amount of Rs 2.8 Lakh. The policy term is for 12 years.
In case, policy holder dies during the policy term, within 5 years from the date of purchasing the policy then death benefit i.e. Basic Sum Assured on death (10 times of single premium amount) is payable to his nominee.
If death occurs between 5 years and before the maturity date (12 years), death benefit (Basic Sum Assured + Loyalty Additions) is payable to the nominee. (Basic sum assured = 10 times of single premium amount)
Death Benefit under this plan = 10 times of tabular premium amount i.e. Single premium amount – Service Tax.
In this example, for Sum Assured of Rs 5 Lakh, the premium amount is Rs 2, 80,243. Out of this, Rs 2, 68,175 is tabular base premium and Rs 12,068 is Service Tax.
So, death benefit = 10 times of tabular single premium = 10 * Rs 2, 68,175 = Rs 26, 81,750.
In case, the policy holder survives till the maturity of policy, maturity benefit (SA + LA) is payable to him/her. (Here, SA is not equal to 10 times of single premium but it is normal Sum Assured i.e. Rs 5 Lakh in our example).
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